State Tax not pulling in Federal Income

[RiverCitiesFan]

I am using Turbo Tax Premier for Mac.  I have two States downloaded.  The first State (ND) seems to work just fine.  The second state (MN) is not pulling in the Federal Adjusted Gross Income.  Not sure if this is a bug or if I am not doing something right?

Thanks

[DavidD66]

You may not need to file both a Minnesota and North Dakota tax return. Minnesota and North Dakota have a reciprocity agreement.  Generally, only your home state will tax the personal service income you receive from an employer in a reciprocity state. When this happens, you only need to file a return in your home state instead of in both states, unless you had tax withheld from the non-resident state.  If you were a part year resident of both, then you will need to file a return with both.  On the Minnesota return, you will need to allocate the MN share of income in the program.  See screen shot below.  If this does not resolve your issue, please respond back with additional information, such as state of residency, state where you work, etc.  

[DavidD66]

You may not need to file both a Minnesota and North Dakota tax return. Minnesota and North Dakota have a reciprocity agreement.  Generally, only your home state will tax the personal service income you receive from an employer in a reciprocity state. When this happens, you only need to file a return in your home state instead of in both states, unless you had tax withheld from the non-resident state.  If you were a part year resident of both, then you will need to file a return with both.  On the Minnesota return, you will need to allocate the MN share of income in the program.  See screen shot below.  If this does not resolve your issue, please respond back with additional information, such as state of residency, state where you work, etc.

[RiverCitiesFan]

Hi David,

Thanks a bunch for the reply.  First question, when you say allocate the income, you are referring to allocating my sons (not sure if I mentioned this was his return) federal income between the two states?  The reason this came about is explained below in another post I started that is related.  Text below.

My son, who we still claim as a dependent, had two employers in 2022.  He is still a legal resident of Minnesota, but attends college in North Dakota.  His summer job withheld MN taxes, but his job at college withheld ND taxes.  How do we file his taxes?  Do we fill out both MN and ND tax forms?

ErnieSO answered as follows:

File a resident Minnesota income tax return and report all your son’s income from both states. 

You son is a full-year resident of MN, even if he attends college in ND. Attending college is considered a temporary absence and not a change of residency.

Minnesota and North Dakota has reciprocity, meaning his ND employer should have withheld MN tax.

Because your son’s employer took out ND tax, you’ll have to file a non-resident ND return it get it back.

On your North Dakota nonresident return, change your son's wages to $0, print out the form and follow these steps from ND:

If you received wages covered by reciprocity, and your employer withheld North Dakota income tax of $5.00 or more from them, you must file a North Dakota individual income tax return at the end of the tax year to obtain a refund of the amount withheld.

If this applies to you and you do not have any other gross income from North Dakota sources, complete Form ND-1 as follows:

1. Complete the applicable items at the top of Form ND-1, page 1 (through line E), as instructed.
2. For item F, fill in the circle next to “MN/MT RECIPROCITY” at the top of Form ND-1, page 1. Also enter “MN” or “MT”, whichever applies, in the space under “State.”
3. Leave lines 1 through 25 blank.
4. Fill in the amount of the North Dakota income tax withheld on lines 26, 28, 29, and 32.
5. File Form ND-1 with a copy of your federal return and Form W-2s showing North Dakota income tax withholding.

[HopeS]

As mentioned by ErnieSO posted, you will need to file a nonresident state return for ND for your son to get the refund for the taxes they withheld. The first thing you want to do is make sure you've filled out the Personal Info section correctly:

Please follow the steps below carefully.

1. With your return open, select My Info in the left-hand menu.
2. Then, on the Personal info summary screen, scroll down to Other State Income, and select Edit.
3. Did you make money in any other states? the question, answer Yes and make sure your nonresident state(s) are selected from the drop-down.
4. Select Continue to return to your Personal info summary.

After you finish your federal return, you'll automatically move to the State tab, where you'll see your nonresident state(s) listed in addition to your resident state.

Tip: To ensure accurate calculations, always complete the non-resident return first if filing in multiple states because your resident state might give you a credit for any taxes paid in that situation.

Also:

• Select the long form (if the option is available) even if TurboTax defaults to the short form.
• Only report the income attributable to the nonresident state.
• If preparing a nonresident return solely to recover erroneous tax withholdings, enter 0 on the screen that asks for the amount of income earned in that state. This will eliminate your tax liability for that state, resulting in a full refund.
• If you live in a reciprocal state, consider submitting an exemption form to your employer so you don't have to file a nonresident return next year.

How to file a non-resident State return

@RiverCitiesFan 

[RiverCitiesFan]

Thanks Hope I will give this a try.